Globalisation double-edged sword for India: Subbarao

….."In a globalised world, the challenge for us is to accelerate growth and make it inclusive, as we are a poor country in terms of per capital income and other social indicators though we have a large economy at an aggregate level," Subbarao told business school graduates of the Indian Institute of Management-Bangalore (IIM-B) at its 37th annual convocation address……..

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RBI favours dynamic provisioning norms

,,,,,The RBI said that the present provisioning policy has several drawbacks, including the rate of standard asset provisions has not been determined based on any scientific analysis or credit loss history of Indian banks.,,,,,,

Read - The Hindu

May their souls rest in peace……

I deeply regret to advise you of the passing away of two of our friends. Many of you would have worked with them closely.

1. Shri Dipchand J. Sabhnani  passed away on 21st March 2012, in Mumbai. He was born on 2nd March 1940 and worked in RBI  from 21/12/1960 to 31/3/2000.  He retired as Assistant Manager from DEAP.  He was a  very genial person, who sported a perennial smile. He is mourned by a wide circle of friends and well-wishers.

2. Shri.K.Neelakandan, fell victim to a massive heart attack and passed away in Trichur on  22rd March 2012 in Trichur where he had settled down after his retirement. He retired as DGM  from Trivandrum Office. He worked in RBI  for over 35 years and was 72 years at the time of death.

 - P.P.Ramachandran (via e-mail)

'Fake' currency notes recovered from ATM

..... These notes were being referred to the RBI and the Nasik Printing press for verification, Superintendent of Police K. Raghuram Reddy said......

Read - The Hindu

23 NBFCs operating in State without RBI nod: Govt

GUWAHATI, March 30 – There are 109 non-government financial institutions operating in the State. They are registered with the Reserve Bank of India (RBI) and working as Non-Banking Finance Companies (NBFCs). But the RBI has granted permission to none of these companies to collect people’s money as deposits…………….

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Non-event Budget leaves all the hard work for Subbarao

……Not an easy to-do list for an RBI governor with limited options in hand and a government which keeps insisting he must cut rates despite New Delhi not lending him even a semblance of a helping hand.

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Govt indecisive on cooperative banks' revival plan

.....Sources said that there was no consensus on the proposal to pump Rs 203 crores in Jammu Central Cooperative Bank (JCCB) and Anantnag Cooperative Bank to make way for both of them to get license of Reserve Bank of India (RBI)……..


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RBI penalises Siddhi Co-operative Bank of Ahmedabad

….RBI had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply and after considering facts of the case, bank’s reply and personal submissions in the matter, RBI came to the conclusion that the violations were substantiated and warranted imposition of penalty.

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All banks to remain open till 5 pm tomorrow

….The Reserve Bank has directed private and public sector banks to remain open on March 31, 2012, with a view to facilitate accounting of all government transactions for the current financial year (2011-12)……..

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RBI’s debt purchases to offer temporary relief

….The Reserve Bank of India’s (RBI) efforts to ease a prolonged cash strain through debt purchases will only offer temporary relief to bonds and swap markets, given the heavy supply of debt waiting to be sold in coming months. RBI officials have made clear any injection will be motivated solely by liquidity shortages, especially ahead of big weekly sales of debt, and have been consistent with their message that they are not focusing on bond yields. ……..

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Can joker in the pack 'rupee' outperform in FY13?

.... In February 2011, the rupee fell against most major currencies after the RBI deregulated interest rates on NRI deposits. In response, banks increased rates on such deposits by up to six percentage points. This was a sweet deal for NRIs who could now invest their dollar earnings in Indian banks and get up to 10% a year…….

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Indian Arm Of Japanese Bank Adopts FRSGlobal's ADF Solution

Wolters Kluwer Financial Services, a leading worldwide provider of risk, compliance and audit solutions for the financial services industry, has announced that the Indian arm of a leading Japanese bank has selected its FRSGlobal solutions in order to meet the automated reporting standards defined by the Reserve Bank of India (RBI)………….

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Relief for bank following decision to release funds

..... the Department of Cooperative has ordered the Managing Director of Karnataka State Apex Cooperative Bank to release the amount so that the bank complies with Section 11 (1) of the Banking Regulation Act 1949 to get licence. The National Bank for Agriculture and Rural Development (NABARD) too has reportedly written to the RBI on the financial position of the bank......

Read - The Hindu

LIC to invest Rs 147 cr in Vijaya Bank

.........The capital infusion would strengthen the tier one capital of the bank. Vijaya Bank’s tier capital (net worth) will help keep Vijaya Bank tier one capital to 9 per cent as mandated by the RBI.

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Fiscal deficit can spin out of control

......With less money available for companies to borrow, the central bank shall, therefore, have to resort to more pro-active open market operations to generate liquidity. Quietly, but surely, the FM has passed on the baton to the RBI to reconstruct the fiscal health of the economy!.......

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RBI cautions Nagaland on fiscal deficit

.....All rejoicings aside, , the RBI report sufficiently implies that Nagaland being a no-revenue state seriously requires a drastic paradigm shift in internal revenue generation or the deficit would pull her down the finances scrap yard. “All special category States with base fiscal deficit of less than 3 per cent of GSDP in 2007-08 could incur a fiscal deficit of 3 per cent in 2011-12 and maintain it thereafter. Manipur, Nagaland, Sikkim and Uttarakhand should reduce their fiscal deficit to 3 per cent of Gross State Domestic Product (GSDP) by 2013-14,” the study of Reserve Bank said.
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CVC appoints Shyamala Gopinath as chairperson of advisory board

Mumbai, March 29: Ms Shyamala Gopinath, a former Reserve Bank of India Deputy Governor, has been appointed as Chairperson of the Advisory Board on Bank, Commercial and Financial Frauds. Ms Gopinath's appointment by the Central Vigilance Commission is for a period of two years and is effective from March 26, 2012. The chairperson's position was vacant for nearly two months prior to her appointment. Mr Janki Ballabh was the Chairman of the Advisory Board till January 31.  The Board is part of the organisational infrastructure of the Central Bureau of Investigation (CBI), with the RBI providing the required investigative and secretarial services, along with necessary funds. The Board's jurisdiction is confined to those cases, where in disagreement or dispute with a bank, public sector undertaking or financial institution, the CBI wants to register a regular case/preliminary enquiry in respect of an allegation of fraud. The frauds covered by CBI investigations include those in borrowal accounts in public sector banks, and financial or commercial frauds in a financial institution or public sector undertaking.

HBL 

CVC reconstitutes advisory board to check commercial fraud

......Other members of the board include retired Indian Administrative Service officer, Mr Vivek Mehrotra; retired Indian Police Service officer, Mr Balwinder Singh; former Chairman and Managing Director, Bank of Maharashtra, Mr A. S. Bhattacharya; ex-Executive Director of Corporation Bank, Mr Asit Pal; and Chartered Accountant, Mr T. N. Manoharan.

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Worst part of eurozone crisis over: Ex-RBI governor

….."The worst part of negotiation is over. But in any case this will not be resolved in current calendar year, because elections are due in many countries," Reddy, said in his lecture on "Indian Economy: Review and Prospects" organised by IIT Madras……

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Back-end issues in financial inclusion

The Financial Inclusion Plan drawn up by RBI envisages bringing more than 3.5 lakh villages into the formal banking network by March 2013. The count achieved till now is approximately 1.2 lakh villages. In view of the massive scale of rollout targeted, banks have been permitted to outsource part of the technology and manpower requirements of their FI projects from competent technology services providers (TSP). Further, RBI having permitted corporate entities to be enlisted as banking correspondents, eligible TSPs can also undertake BC services, thus participating end-to-end in the FI delivery process...........

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IIM-B convocation

..... D Subbarao, Governor of Reserve Bank of India, is expected to be the chief guest. As many as 371 students will be attending the ceremony.

Read -The Hindu

RBI Scholarship Scheme for Economics Faculty Members 2012

….The main objective of the scholarship scheme is to increase awareness about the activities of the Reserve Bank among faculty members and student community. The scheme will provide exposure to faculty members teaching subjects of economics and or finance in different areas or activities in the Reserve Bank of India……….

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RuPay: Your role to play

......This short article does not provide the space to fully explain the extremely intricate and often hyper-secretive details of the payment processing industry. Suffice it to say that this is the next logical step to what RBI and its wholly-owned subsidiary, the National Payment Corporation of India (NPCI) has already done to establish control of ATM switches in India.......

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Blow to NCP-controlled bank

In a fresh setback for the Sharad Pawar-led NCP, the Reserve Bank of India (RBI) on Thursday dissolved the board of directors of the NCP-controlled Sangli District Central Cooperative Bank for rampant irregularities and blatant violation of the Banking Regulation Act……….

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New panel for ‘reliable’ inflation, IIP data

.... The government's decision to review the entire data collection, collation and calculation mechanism for inflation and industrial production is welcome. It's not just economists who have reservations about official data, even RBI has raised doubts over its reliability. Given the fact that crucial policy decisions depend on official data, this is very worrying……

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Banks haven't made significant penetration in m-banking: RBI

.... "Banks have not really made a significant penetration even among their existing customers to extend mobile banking services," RBI Deputy Governor KC Chakrabarty said at an International Banking Summit in Mumbai……

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RBI allows cross border remittances through mobiles

....Banks will have to be responsible for ensuring quality of funds, adherence to know-your-customer, and so on, said Dr K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, at an International Banking Summit.......

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Government to unveil revised FDI policy paper tomorrow

..... The government in 2010 had decided to come out with consolidated FDI policy paper summarising all the regulations including those of FEMA and Reserve Bank of India (RBI) for the benefit of foreign investors……

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RBI moves step closer to issuing pvt bank licences

....The Reserve Bank of India (RBI) has moved a step closer to issuing fresh private sector bank licences, with the government moving to seek the Cabinet’s approval for amendments in the Banking Regulation Act (BRA). The amendments in the BRA would empower the RBI to supersede the boards of banks and suspend licences in case of any wrongdoings. The Cabinet is expected to approve the amendments as early as this week........

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Foreign firms with minor bank links may get to do proprietary trading

……"RBI has agreed to re-examine the regulatory regime in the case of foreign companies where its parent is not a bank," a government official said. A meeting on the issue, held in February, was attended by representatives from RBI and departments of industrial policy and promotion, financial services and economic affairs………..

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Banks told to better manage NPAs

Details

Rectify spike in NPAs: RBI orders banks

....."Concerns (on NPA) are there. Banks have to improve their ability to manage NPAs. We have told banks what is their lacuna. They have to improve their information system. But we see that the situation is not alarming. Though this is our concern. Hope banks will be able to manage them," Deputy Governor K.C.Chakrabarty told reporters on the sidelines of a function organised by Yes Bank here.....

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Loan-deposit ratio may tie RBI hands on rates

The Reserve Bank of India is facing yet another challenge in its endeavor to lower benchmark rates, as high loan-to-deposit ratio will make it difficult for lenders to lower borrowing costs even if the RBI takes policy measures to ease the pressure………

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State Bank's deposit rate increase stumps peers

..... SBI officials said it was unlikely the bank would pare its base rate anytime soon. “Even if there is a repo rate cut by the Reserve Bank of India (RBI), market rates are not going to come down. Also, at a time when companies are not sure about their future and credit risks are high, it does not make sense for banks to lend at lower rates,” a senior executive of the bank said……..

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RBI keeps ‘Ways and Means Advances' to States at last year's level

.....A State entrusts its banking business — including payments, receipts, collection, remittance of money, management of public debt and issue of new loans — to the RBI by voluntarily entering into an agreement with the RBI......

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The market's three worries : Akash Prakash

….The second issue concerns the direction and pace of interest rate cuts and monetary policy easing. Many market observers had pencilled in 150 basis points of interest rate cuts by the Reserve Bank of India in the calendar year 2012, and a full pass-through of these cuts by the banking system, and thus were quite bullish on both the market and the general economic outlook. However, this may no longer be possible. Many of the more astute economic commentators now think that rate cuts will not be more than 50 to 75 basis points — and even these will not be fully passed on by the banking system to borrowers……

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Temple panel seeks SC permission to open vault B

….Meanwhile, it asked the panel to supply copies of its report relating to the plea to other parties in the dispute. The committee in its report had stated that construction of a new high security vault on the lines of the RBI may be taken up only after opening vault B of the temple to determine the quantum of wealth artifacts stored in it since several generations……

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Bangalore costliest Indian city to live in: Survey

Glitzy tech capital Bangalore just earned a new sobriquet - the costliest Indian city. An analysis of the Reserve Bank of India's Consumer Price Index (CPI) shows that Bangalore is a couple of notches higher than the all-India cost-of-living average, with financial capital Mumbai just a shade behind……………..

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Revised RBI norms for NBFCs to improve asset quality: Assocham

Industry chamber Assocham today said the revised guidelines on fair practices code for non-banking finance companies (NBFCs) will bring adequate disclosures and non-coercive recovery methods. The steps by RBI are pro-active and timely for orderly and transparent growth of NBFC sector, it said……….

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Muthoot Estate Investments barred from taking public deposits

...."The RBI has directed Muthoot Fincorp Ltd to stop allowing the use of its premises or branches or officials, in any manner by Muthoot Estate Investments for accepting deposits from public," the RBI said in a notification......

Read - Business Today

Will Subbarao oblige Mukherjee?

...... Two questions are relevant. First, when should the repo rate be reduced? And second, what should be the extent of reduction in the repo rate? Going by the experience of 2008-09 when the economy was in a similar position, a quick reversal of GDP growth became possible because the repo rate was reduced from 9 percent to 4.75 percent in just a few months. The RBI has to move that fast now to get the economy back on the rails to achieve 7.6 percent growth. But will Mr Duvvuri Subbarao oblige Mr Pranab Mukherjee? 

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RTI action makes 105 branches of leading banks become “customer-sensitive”

.....Commodore Batra sent an email to V.S.Das, Executive Director, Reserve Bank of India (RBI), stating, “I am writing this with urgent plea for RBI’s intervention to assure safety of assets of customers holding accounts and lockers in Noida. You may be aware that about 104 branches of various leading banks are operating in Noida from residential areas for decades now.........

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Customer needs & rules to drive banks' IT spend: Survey

.... The regulations and compliance norms — like Basel-II and -III, financial inclusion drive of RBI and IFRS convergence — will also drive PSBs to adopt new technologies. Some technological priorities at PSBs include data warehousing, BI and CRM. The IT landscape in banks has evolved since adoption of core banking solutions, aimed at automation of systems. The question of 'whether to adopt technology' has now transitioned to 'what new technologies to embrace', to achieve differentiation. Add to this the financial inclusion initiative, high on the agenda of the Reserve Bank of India, which aims to bring financial services to remote parts of the country.

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Five reasons why RBI will not cut interest rates soon

The Reserve Bank of India has limited headroom to cut key benchmark interest rates rapidly. To stimulate growth, RBI needs to cut repo rates sharply and reduce the cost of borrowing for all. Repo rate (currently at 8.5 per cent) is the rate at which banks borrow from RBI. Here are five reasons why RBI is unlikely to do that so soon:……..

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Banks likely to hold deposit rates till liquidity improves

.......... RBI is expected to cut policy rates on April 17 when the central bank announces the annual monetary and credit policy for 2012-13. While RBI said in its mid-term policy review that future actions will be towards monetary easing, it also pointed out that the timing and pace will depend on inflationary trends. Policy rate has been held at 8.5 per cent since October 2011 citing upward inflation risks.

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India's new growth paradigm: Faster growth with bigger deficit and higher inflation

........... It needs to be grasped that a high rate of inflation per se is not a problem. It is variability in the rate of inflation that is the problem as economic agents are then faced with uncertainty. The worry when inflation rate touches double digits is that policymakers have lost control over it, so it can shoot up even further. However, if the RBI can demonstrate that it can contain inflation at 6-7%, growth need not be derailed.

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Obituary

C.V.KALYANA SUBRAMANIAN (80yrs) West Mambalam. Ex-RBI passed away on 27.03.2012..Phone:044-24895329 

The Hindu

RBI relaxes norms on overseas direct investments

..... “To grant more flexibility to the Indian party, it has been decided to further liberalise various provisions or regulations of overseas direct investments…”......

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R. K Tandon - Reserve Bank of India - Exclusive Interview

......... I am indeed very happy & consider it as a privilege to participate on “World Consumer’s Day’. RBI has taken several initiatives in terms of reaching uncovered population to make financial inclusion..........


Watch the video............... 

Will pass on CRR cut benefit to SMEs: SBI

........ What are you expecting from the Reserve Bank of India after that March statement, which sounded a tad hawkish and subsequent developments on fiscal deficit and oil? We have seen people losing faith in that expected rate cut on April 17th. What are you expecting?......

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RBI to be lenient on debt-like FDI

The Reserve Bank of India has toned down objections to FDI instruments with alleged debt nature and agreed to allow them subject to certain conditions...............

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GAAR may change type of FIIs entering India: Deutsche Bank

...... There are two other issues to be worried about. One is what happens with inflation and what happens with the RBI. If fuel price decision is delayed all the way to June, we could probably see disinflation of 50-100 bps for the next few months and RBI could even go ahead and cut. That could actually even have a positive impact on the long end of the market. So I am not looking at 9% that's the bottomline........

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RBI cancels co-operative bank's licence

The Reserve Bank of India has cancelled the licence of The Bhusawal People's Co-operative Bank Ltd — the Jalgaon-based cooperative bank in Maharashtra, following depositors' concerns.............

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Airtel to tie-up with banks for cash withdrawal services

..... Under the latter service, Bharti’s retail or Airtel stores can act as banking correspondents, wherein a user can transfer money to another user, who can then go to its nearest such authorised shop to withdraw the cash........

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Surara border hamlet gets JK Bank branch on RBI Guv's promise

Jammu, Mar 27 (PTI) J&K Bank today opened a branch at Surara village located close to the Indo-Pak border in Samba district, within days of RBI Governor D Subbarao's assurance to provide banking facilities to the residents of the area. The bank today inaugurated a fully computerised Business Unit at Surara – a far flung village in Gagwal block of district Samba…………..

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RDHS exhibits various produces in RBI program

ITANAGAR, Mar 27: The Rural Development and Heritage Society (RDHS), Sangram participated in the Reserve Bank of India (RBI)-hosted financial outreach programme at Kimin under Papum Pare district yesterday. During the program, more than 34 SHGs and Lower Jhumi farmers’ club under RDHS exhibited their agriculture, sericulture and handicraft produces, dry flower making, door mats and traditional ornaments. Before the start of the main function, H R Khan, Deputy Governor, RBI and other top banking officials spoke on the credit linkage of banks to the SHGs and farmers and other related schemes. They also discussed the function of SHGs. In the main function, RBI Deputy Governor and Chairman APRB gave away sanction letter to six farmers on Kishan Credit Card.

http://www.echoofarunachal.com/?p=14643

1 lakh self-employment opportunities in the next 5-yr-Plan: Tuki

The state government has planned to create at least one lakh self-employment opportunities in the next Five Year Plan through 'Chief Minister's Transport Subsidy Scheme, Arunachal Pradesh Chief Minister Nabam Tuki said. While interacting with RBI deputy Governor H R Khan, who called on him late last evening here along with chief general manager SBI R K Garg, regional manager (Itanagar) B N Das and other officials, Tuki expressed his government's desire to coordinate with banks, especially SBI, to implement self-employment schemes for the educated unemployed youths..............

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Two sides of a tinkling coin story

THIRUVANANTHAPURAM: Saving a penny for the future is not only a wise man’s counsel but for the Reserve Bank of India also, on a different scale. But when the state is reeling under acute coin shortage, the RBI Regional Office here has created a record of sorts by holding Rs 29.04 crore worth of coins of various denominations as on December 1, 2011. In a startling disclosure, forced through the RTI filed at the Department of Currency Management, RBI Central Office, Mumbai, it has come to light that the RBI Regional Office has kept more than 80pc of the coin stocks under its custody from January-November, 2011. The information availed of by the Right to Information Protection Forum (RIPF) shows that though coins …………

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Shortage of coins hits Surat

........ According to an estimate, coin remittance of Rs 50 lakh takes place from RBI Ahmedabad to Surat in one installment. The only problem is, two such installments come in a year against the demand of Rs 1 core in a month. This problem is not faced in cities like Ahmedabad and Mumbai which have RBI branch………..

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Counterfeit currency from ATMs?

When such a currency note pops out at you from an ATM, you can do nothing about it. Take it back into the bank branch, the staff with write ‘FAKE’ or similar on it in thick marker ink, indelible, and you are on your way, poorer but not wiser. The RBI has to be much more proactive to stop the menace.................

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RuPay out to make debit cards safer

......NPCI's RuPay will be accepted at all 91,000 ATMs and over 6 lakh Point of Sale (PoS) terminals in the country. According to the Reserve Bank of India (RBI) data there are close to 27 crore debit cards in India. Public sector lenders Bank of India and Union Bank of India have already started issuing RuPay debit cards to customers and other banks are likely to do the same soon..........

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Avoid sharp variations on similar term deposits' rates: RBI

……"If it (the difference between retail and bulk deposit rates) varies too much, then there is something wrong," Reserve Bank Deputy Governor KC Chakrabarty said. He asked banks to discourage moves to offer sharply different rates on deposits with very little differences in maturities……….

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'Indian system not feasible for interest-free Islamic banking'

…"RBI has informed that in the current statutory and regulatory framework, it is not legally feasible for banks in India to undertake Islamic banking activities in India or for branches of Indian banks abroad to undertake Islamic banking outside India,"………

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Making priority sector lending work

……..The M V Nair Committee on priority sector lending has recommended “allowing non-tradable Priority Sector Lending Certificates (PSLCs) on pilot basis that can be only transacted between domestic scheduled commercial banks, foreign banks and RRB. ”. Furthermore it says “Based on the experience gained from the above-restricted pilot project, RBI may consider allowing use of the above instrument to all other market participants and putting in place architecture of tradability of these certificates.”…….

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From sugar to eggs: what our food basket says about our income

..... We know that per capita income is up. And we know anecdotally that food prices are soaring, but can we say the two are linked? And if yes, what parts of the food basket are seeing the biggest price push? Using data from two papers written by Reserve Bank of India (RBI) Deputy Governor Subir Gokarn,........

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Scam-hit MMCB gets another jolt: RBI warns it may cancel licence

........ In yet another jolt to the crisis-ridden Madhavpura Mercantile Cooperative Bank (MMCB), the Reserve Bank of India (RBI) has threatened to cancel the licence of the bank. It issued a show-cause notice to the board of administration last week seeking clarification on why the bank's licence should not be cancelled………

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Cocktail FY13

.....Meanwhile, projections on interest rates and the money supply situation hint at another good year for fixed income asset classes. Estimates on policy rate cut by the Reserve Bank of India have already turned tepid, coming down to 150 basis points for the whole of 2012-13 from 250 basis points projected before the budget........

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Govt to play catch up on encryption norms

.....The policy entails increasing the encryption norms from 40 bits to 128 bits. Bits are used to define the level of coding of a message; the more the bits, the greater is the security of an online transaction or even an email. Entities including the Reserve Bank of India (RBI), commercial banks, insurance companies, service providers, and the Indian units of Microsoft Corp. and BlackBerry-maker Research In Motion Ltd (RIM)have already switched to a minimum encryption of 128 bits, said a high-ranking government official.......

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RBI to continue tight liquidity stance till inflation eases

NEW DELHI: The Reserve Bank today said its tight liquidity stance would continue as long as inflation is above its comfort level. "If inflation is high above the comfort level, RBI's general effort will be to keep the liquidity tight," RBI Deputy Governor KC Chakrabarty told reporters on the sidelines of SKOCH summit here………

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Govt to borrow Rs 3.79 lakh cr in Apr-Sep

....."We have budgeted fiscal deficit at Rs 5.13 lakh crore. In the first half gross borrowing will be Rs 3.79 lakh crore," Department of Economic Affairs Secretary R Gopalan told reporters here after a meeting to decide the borrowing calendar for the next fiscal. The meeting was attended by RBI Deputy Governor H R Khan and senior officials of the finance ministry........

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Will RBI’s Subbarao be forced to play villain in April?

The Reserve Bank of India’s job of managing inflation just gets tougher everyday. Overall prices in the economy show few signs of cooling; instead, everyday there’s news about something that will take prices even higher…………

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Emerging economies may see growth under pressure: Ajay Bagga

.... As expected, the RBI has kept all key policy rates unchanged in the recent monetary policy review. The central bank highlighted its inability to provide a clear monetary easing signal, noting persistence of inflation risks due to rising global crude oil price, weak domestic fiscal position and a vulnerable exchange rate. The RBI has been keen to cut rates since the January policy meeting, but with both global and local economic indicators bottoming out and inflation not easing sufficiently, its room for cutting rates has arguably shrunk…….

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SBI hikes fixed deposit rates by up to 1%

.... According to analysts, hike in fixed deposits rate of short-term maturities is mainly because of tight liquidity situation in the system. Tight liquidity situation in the system had forced banks to borrow over Rs 1.90 lakh crore from the Reserve Bank of India (RBI) yesterday……..

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Mani urges banks to reduce interest rates

…..The meeting was attended by P K Mohanty, Additional Chief Secretary, Subrata Biswas, Principal Secretary, Planning & Economic Affairs Department, V P Joy, Principal Secretary, Finance Department, Sarada Muraleedharan, Executive Director, Kudumbashree, Suma Varma, Regional Director, Reserve Bank of India, K C Shashidhar, Chief General Manager, NABARD,…….

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Small ticket

.... Once the RBI initiates cuts in its repo rate, banks may opt to reduce the rates on their deposits first before lowering rates for borrowers. On the other hand, the new interest rates on small savings are applicable for the entire financial year from April 1. This – along with the possible diminished appetite for gold from the recent Budget imposts and also the huge 125 basis point reduction in the rate on statutory Employees Provident Fund deposits – may somewhat redeem the image of small savings schemes among those looking for safety and stability in returns.....

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HC seeks RBI views on silver bricks

Orissa High Court has issued notices to the Reserve Bank of India (RBI) soliciting its views on a petition seeking to auction all the 522 silver bricks, worth over Rs 80 crore, retrieved from a mutt in Puri last year. Justice M M Das yesterday issued notices to RBI and fixed the next date of hearing of the case on April 30. The notice followed a petition filed by the Emar Mutt pleading the High Court to direct the RBI to auction sale the silver bricks and to keep the proceeds with the RBI until their ownership was decided…………….

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Gold loan firms to meet RBI over new lending norms

...............Gold loan NBFCs are upset about the RBI circular as it will put them at a further disadvantage compared with commercial banks. While banks can lend 140 per cent of the gold value, these NBFCs can now give loans only to the extent of 60 per cent...........

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Gold loan stocks tank as firms see slowdown ahead

.....“It is an indication that investors are gradually exiting the stocks after realizing the impact of the RBI regulations. Many global private equity investors and FIIs had a fancy for gold loans NBFCs and considered them safe. But the recent developments have instilled a fear of gold loans business going the microfinance way,” ........

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RBI to open branch at Itanagar

ITANAGAR, March 26 – Reserve Bank of India (RBI) will open a branch here soon. Addressing the participants at the financial outreach camp held at Kimin in Papum Pare district in Arunachal Pradesh today, RBI Deputy Governor H.R.Khan said steps would be taken for establishment of RBI branch at Itanagar soon while a State Bank of India (SBI) branch would be opened at Kimin within six months. This will be RBI’s fourth branch in North East after the proposed branches at Shillong and Agartala besides the existing one at Guwahati. Khan also announced that Arunachal Pradesh Rural Bank would be brought under core banking umbrella soon. Underlining the importance of widening banking facilities in all parts of the country, especially in North East to enhance the economy of the region, the RBI Deputy Governor informed that as part of its Platinum Jubilee celebration, RBI has conducted 21 outreach camps in different parts of North East including three in Arunachal Pradesh with an aim to sensitise public about various banking facilities and bring them under the fold of mainstream banking. He cautioned the people against frequent online lottery prize announcements that dupe innocent people and advised people to report such cases to police. Khan further highlighted various innovative schemes launched by banks including National Electronic Fund Transfer (NEFT) and mobile banking which is likely to pick up in next two-three years in the area.  Speaking on the ombudsman role of RBI, B.B.Sangma, the Banking Ombudsman informed the people that it serves as a Banking Lokpal and looks into various complaints of customers relating to banking practices including pension matters, interest rates and shortage of coins, etc. S Marandi, Regional Director, RBI, Guwahati, while welcoming the guests, informed that similar awareness camps in the Northeastern region are being organised to involve people from remote areas to banking practices and thereby to enhance their economic standard.

The Assam Tribune

Speculative innovation

Paul Volcker, former chairman of the US Federal Reserve, used to say the only worthwhile financial innovation in last 60 years is the automated teller machine (ATM). Reserve Bank of India’s Deputy Governor K C Chakrabarty recently quoted Volcker’s famous comment but added in his forthright style, “The ATM was the only innovation; others were only speculation.”

BS

RBI asks banks to locate 1.2 crore inoperative accounts: Government

....... "Keeping in view public interest, the RBI has advised all SCBs (scheduled commercial banks) to play a more pro-active role in finding the whereabouts of the account holders whose accounts have remained inoperative,".........

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No need for signature attestation for opening fixed deposits, lockers: Reserve Bank of India

..... The Reserve Bank on Monday asked banks not to insist on attestation of signatures of persons wanting to invest their funds in fixed deposits schemes or opening a bank locker......

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Payment gateway Rupay launched

...... Reserve Bank of India (RBI) Executive Director G. Padmanabhan said the central bank will not endorse banks to choose the RuPay network. “Banks can choose what they want, but if the costs are so low, then obviously they will save a lot,” he said.......

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Banks should cut transaction charge on debit cards: RBI

..... “We are saying that the debit card interchange fee should be lower because credit cards get paid after sometime, whereas in debit cards, there is an instantaneous debit into my account. Hence, logically debit cards charges should be lower,” said G Padmanabhan, Executive Director, RBI, who is in-charge of the payments and settlement system………

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Debit cards based on RuPay platform launched

.....State Bank of India, Bank of Baroda, Bank of India, and Union Bank of India on Monday formally launched debit cards based on the indigenously developed RuPay payment platform........

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Bank bad loans a concern, effort on to fix it: DK Mittal, Financial Services Secretary

...........There are two type of financial inclusion- one on paper and other in reality. First, we have advised banks to close down dormant nofrill accounts, or to merge them to get a clear picture. Second, we hope that once the ultra small branches become operational, we will be able to resolve this issue. These branches will cost Rs 6,000 each month, which is recoverable easily if they do a business of Rs 5-7 lakh.........

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To fix BPL, nix CPL

One Tendulkar makes the big scores. The other wrecks the averages. The Planning Commission clearly prefers Suresh to Sachin. Using Professor Tendulkar's methodology, it declares that there's been another massive fall in poverty.............

TRead - he Hindu

Beware of fake currency, say police

Coimbatore City Police have asked the public to be cautious as counterfeit currency notes are in circulation. The police said that in the recent past two incidents had come to their notice. In the first incident, a railway employee was found in possession of 15 counterfeit currency notes of Rs. 1,000 denominations, which came to light when he went to a bank to send money to his relatives. In the second incident, a car owner who tried to pay for fuel was found tendering a counterfeit Rs. 1,000 note. Enquiries with the car owner revealed that he got the note from an ATM in Kerala. The police asked public to be cautious while dealing in Rs. 500 and Rs. 1,000 notes and asked commercial establishment owners and employees to be aware of the safety features in currencies.

The Hindu

Banks need to narrow retail, bulk deposit disparity: RBI deputy

.... "If it (the difference between retail and bulk deposit rates) varies too much, then there is something wrong," said Reserve Bank of India Deputy Governor K.C. Chakrabarty on the sidelines of a banking event........

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RBI prevails; bank branches with Rs 6 cr biz to be audited

The finance ministry and Reserve Bank of India (RBI) have finally agreed that bank branches with advances of at least Rs 6 crore are to be audited. The ministry earlier wanted the threshold to be Rs 20 crore. RBI, however, wanted it to be Rs 6 crore.............

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Fiscal deficit estimates are unconvincing

....even though the budget estimate assumes zero net Ways and Means Advances (WMA) from the RBI, in the event of continuation of tight liquidity conditions, the recourse to WMA is inevitable. This development would further aggravate the problems of monetary management. With such fiscal pressure, there is no manoeuvrability left with the RBI for a policy (repo) rate reduction. ........

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Relief and shield for small savers

Rates still lower than banks’ but one-year guarantee to come in handy

........The decision to align the small savings rates to the comparable gilt rates was taken on the basis of the report submitted by the Shyamala Gopinath committee last June after a comprehensive review of the national small savings fund.......

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Reserve Bank tightens fair practices code for NBFCs

The Reserve Bank of India, on Monday, revamped the fair practices code (FPC) to be adopted by non-banking finance companies (NBFCs) while doing lending business.The guidelines covered general principles on adequate disclosures on the terms and conditions of a loan and also adopting a non-coercive recovery method............

Read - The Hindu

MFI sector will take years to recover: Philip Vassiliou

.... While the Bill has a number of shortcomings, it will at least establish the much-needed regulatory clarity and affirm the role of the Reserve Bank of India (RBI) as the regulator…….

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Bad loans are looking bigger because the business has not grown this fiscal

........ How do you see (former RBI deputy governor) Usha Thorat’s recommendations on NBFCs? Is the raising of core capital requirement to 12% from 7.5% a concern?

The raising of core capital by 4.5 percentage points may not be a concern for Shriram Transport Finance. It is the reduction of accounting NPAs to 90 days from 180 days, which small borrowers will take time to adhere, who are not serviced by banks. It will take time for these borrowers to make this cultural shift to follow the 90 days (schedule) and, therefore, till then NBFCs’ books will carry larger NPAs and higher provisioning as a result.......

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Not sure if RBI will cut rates in Apr: Rangarajan

......“I’m not sure what will happen as it would depend on the inflation number for March. But during the course of the year, there is a possibility (of rate cut by RBI),”...............

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A rate cut is required now to boost small and medium units' growth: Rajat Madhok

...... Things are pretty tight at present. Not much capex creation is happening by SMEs. However, the past six months have shown some hope and we can see a reversal coming soon. RBI’s monetary tightening has played a major role in making credit availability tight, but with some indications of revival, we are hopeful of a rate cut now………

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Market to fall if RBI does not cut rates says BNP Paribas

....According to BNP Paribas, in case there is no rate action on 17 April, market reaction would be adverse. The RBI may come up with a guidance in the statement on rate cuts going forward, but that would not help market sentiments as the direction is not the question now, the question is about the extent of rate cuts.......

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Cash crunch in banking system intensifies

....The overnight borrowing signify the intense cash squeeze in the banking system now translated to about 3.4 per cent of the aggregate deposits or way above the RBI's comfort level of 1 per cent. The cash squeeze was partly on account of banks pushing credit ahead of the year end in order to build their asset books, bank officials said......

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RBI asks gold loan cos to comply with KYC norms

Tightening the regulations for gold loan companies further, the Reserve Bank of India has asked non-banking finance companies (NBFCs) engaged in the gold loan business to put in place board-approved policy to ensure that KYC (know your customer) guidelines are complied with and adequate due diligence is carried out before extending any loan. ................

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